• 1.3910-20 area continues to act as stiff resistance.
• A modest USD rebound prompts some fresh selling.
• UK budget release/US CPI would determine the next direction.
The GBP/USD quickly reversed a dip to fresh session low level of 1.3879 but was still seen struggling to move back above the 1.3900 handle.
The pair has been facing stiff resistance around the 1.3910-20 region and a modest pickup in the US Dollar demand, supported by an uptick in the US Treasury bond yields, gave another reason to prompt some fresh selling during the Asian session on Tuesday.
Further downside, however, remained cushioned as traders refrained from placing aggressive bets ahead of the UK Annual Budget Release, which along with the latest US consumer inflation figures would help determine the pair's next leg of directional move.
A hotter-than-expected US CPI print would revive worries about steep Fed monetary policy tightening cycle and should trigger a sharp USD rally. On the other hand, a weaker-than-expected headline CPI print should assist the pair to make a fresh attempt to decisively break through a short-term descending trend-line resistance.
Technical levels to watch
Immediate support is pegged near mid-1.3800s, below which the pair is likely to extend the downfall towards the 1.3800 handle en-route its next major support near the 1.3765-55 horizontal zone.
On the flip side, bulls would be aiming to break through the 1.3910-20 strong hurdle, above which the pair seems all set to head back towards reclaiming the key 1.40 psychological mark.
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